How I Paid off 13k in Private Student Loan Debt

Student loans. I think it’s safe to say that almost everyone hates those two words. I, like most folks, hate those two words as well, but the word I hate the absolute most is DEBT. So when I graduated from graduate school and saw that I had to immediately start paying back my student loans. I got a lot of anxiety because I never had that volume of debt before. I tried to think of all the ways that I could get rid of them but it all boiled down to the fact that I, Katreena had to pay them back.

When I went college back in 2008, I was a first-generation student and I didn’t know much about navigating student loan debt and what it would really mean after college was over. I only knew that I needed money to go to college and I didn’t have it so I was going to have to borrow it. I figured that I would think about the rest later. If I could redo things I would do it all over again but I would certainly go after more scholarship and grant money so that I could reduce my student loan debt.

I graduated college and grad school with a sizable amount of federal student loans and a smaller amount of private student loans but all very significant. My plan for handling the federal loans was to get it forgiven through the Public Service Loan Forgiveness program (more on that in another post). Since the private loans were privately funded through Sallie Mae, those wouldn’t get forgiven, so I needed a plan for that 13k. I also realized that the private loans had an extremely high interest rate so if I didn’t address them, they were going to eventually explode.

THE PLAN

My private student loans were broken up into several student loans with varying interest rates. The first step that I took was consolidating them into one student loan. I used LendKey to consolidate my student loans. This allowed me to convert all those small loans into one big loan with a single interest rate. This made my loan simple and streamlined. I was also able to get a great rate with LendKey, I believe it was around 3.75% BUT it was a variable loan so that means the interest rate could change based on market conditions. I believe that it was at 5% by the time I made my last payment.

After my loans were consolidated I made a repayment plan by dividing the 13k into the amount of payments that I would make. This payment amount included the minimum payment (Approx $80) plus any additional payments that I wanted to make. (I wanted to pay an additional $300 per month.) My goal was to pay the loan off in two years. I ended up paying it off in 2.5 years. The loan was set up for me to pay it off in about 15 years. Big difference and lots of savings!  (Disclaimer: These were private loans that’s why I consolidated them, I did not and would not consolidate federal loans with private lenders because you lose any federal student loan protections! Seek professional advice if you have specific questions about what’s best for your situation.)

SIDE HUSTLE EXTRAORDINAIRE  

Now, the amount that I wanted to pay way exceeded the amount that I could pay with my full-time job. I was fresh out of graduate school and wasn’t making a lot of money.

I didn’t have a ton of extra money left over after paying my bills and saving therefore I had to get my hustle on and find side gigs to make the extra payments.

In addition to my full-time job:

• I got a part-time job working at Anthropologie after work
• I babysat after work
• I drove Uber on occasions
• I did mystery shops throughout the week
• I would even do hair occasionally. (I’m a self taught braider and I know how to do a few hairstyles.)

I would put most of the money that I made into my student loan debt. Sometimes the amounts I paid were $20 and sometimes I made payments for hundreds of dollars.

In the end, it all added up and made an impact on my loan balance. I felt so happy and accomplished when I paid this off because I knew that 13k could easily turn into 20k if I left the loan unaddressed. 

IT IS WHAT IT IS

Although I HATE that we, Americans are bogged down and overwhelmed with student loan debt, I am personally thankful because it opened up a door of opportunity for me. I mean, I did get an undergrad degree and a master’s degree. Additionally, I was able to secure jobs that I may not have been able to if I did not have a degree. I was also able to study abroad in college and meet some of my lifelong friends. I’d say the money was well spent.

If you have a debt that you need to attack, create a plan for attacking that debt and get after it by any means necessary. The reality of it is, is that carrying unnecessary debt around doesn’t help you it can only hurt you in the end. Carrying around debt can potentially affect your credit and/or limit your ability to buy the things that you really want to buy like houses or maybe your dream car. Trust me, if you can get rid of it. The great thing is that my approach to paying off my loan can work for almost any debt.

I think what most people have to realize is that you may have to bring in additional sources of income to help pay off the debt if your main source of income isn’t enough to exceed the minimum payments. I know that working more is difficult for some but there are some simple easy ways to make extra money these days. There are endless ways to make money online without even leaving your home. It will just require sacrifice of your time.

KEEP GOING…

I stayed motivated in my journey by realizing that the more money I put toward my debt, the sooner I could quit my part-time job at the mall. That encouraged me and made me go harder. If you are on a debt-free journey (like I am) I wish you the best, it takes a lot of sacrifice and diligence to see it through but I’m rooting for you. I’m rooting for us.

The content on KatreenaDavis.com is not intended to be a substitute for professional financial advice. Please seek the advice of a qualified financial professional regarding your specific financial picture or investment options.